Sharp Increase in Merger Activity in Good Times

The current economic boom, now more than five years old, has provided fresh proof of the axiom that prosperity breeds business mergers. According to the Federal Trade Commission, 1,893 mergers were consummated in 1965, as compared with 1,797 in 1964 and 1,479 in 1963. The total for 1966 appears certain to exceed 2,000.

As was the case in past periods of intense merger activity, government officials are beginning to express fear that concentration will destroy competition. Sen. Philip A. Hart (D Mich.), chairman of the antitrust and monopoly subcommittee of the Senate Judiciary Committee, recently predicted that 200 corporations would own 75 per cent of the country's manufacturing assets within a decade unless the government took preventive action. Hart, addressing the antitrust section of the American Bar Association in Washington on April 14, 1966, asserted that the Federal Trade Commission and the Antitrust Division of the Justice Department had shown little concern about “the greatest merger tide in history.” He added that the federal government might end up presiding over a non-competitive economy.

Speaking in the same forum, Assistant Attorney General Donald F. Turner, head of the Antitrust Division, said he saw no immediate need for drastic antitrust measures. “Antitrust policy,” he said in rebuttal to Hart's remarks, “is too important to be turned into a children's crusade against sin and iniquity.” F.T.C. Chairman Paul Rand Dixon observed that “We do not start with the assumption that all conglomerate mergers are illegal.” “On the contrary,” he said, “we take the view that the great majority are legal. Quite obviously the business community does likewise, because in spite of our so-called ‘tough’ decisions, merger activity has increased in each year I have been at the Commission.”